Index: maven-project/src/main/java/org/apache/maven/project/MavenProjectBuilder.java
===================================================================
--- maven-project/src/main/java/org/apache/maven/project/MavenProjectBuilder.java	(revision 466310)
+++ maven-project/src/main/java/org/apache/maven/project/MavenProjectBuilder.java	(working copy)
@@ -22,6 +22,7 @@
 import org.apache.maven.artifact.resolver.ArtifactResolutionException;
 import org.apache.maven.profiles.ProfileManager;
 import org.apache.maven.wagon.events.TransferListener;
+import org.apache.maven.settings.Settings;
 
 import java.io.File;
 import java.util.List;
@@ -96,4 +97,6 @@
      */
     MavenProject buildStandaloneSuperProject( ArtifactRepository localRepository, ProfileManager profileManager )
         throws ProjectBuildingException;
+
+    void setSettings(Settings settings);
 }
Index: maven-project/src/main/java/org/apache/maven/project/DefaultMavenProjectBuilder.java
===================================================================
--- maven-project/src/main/java/org/apache/maven/project/DefaultMavenProjectBuilder.java	(revision 466310)
+++ maven-project/src/main/java/org/apache/maven/project/DefaultMavenProjectBuilder.java	(working copy)
@@ -60,6 +60,7 @@
 import org.apache.maven.project.validation.ModelValidationResult;
 import org.apache.maven.project.validation.ModelValidator;
 import org.apache.maven.wagon.events.TransferListener;
+import org.apache.maven.settings.Settings;
 import org.apache.maven.MavenTools;
 import org.codehaus.plexus.PlexusConstants;
 import org.codehaus.plexus.PlexusContainer;
@@ -71,6 +72,7 @@
 import org.codehaus.plexus.personality.plexus.lifecycle.phase.Initializable;
 import org.codehaus.plexus.util.IOUtil;
 import org.codehaus.plexus.util.StringUtils;
+import org.codehaus.plexus.util.InterpolationFilterReader;
 import org.codehaus.plexus.util.xml.pull.XmlPullParserException;
 
 import java.io.File;
@@ -169,6 +171,8 @@
 
     private MavenTools mavenTools;
 
+    private Settings settings;
+
     // ----------------------------------------------------------------------
     // I am making this available for use with a new method that takes a
     // a monitor wagon monitor as a parameter so that tools can use the
@@ -290,6 +294,10 @@
         }
     }
 
+    public void setSettings(Settings settings) {
+        this.settings = settings;
+    }
+
     public MavenProject buildWithDependencies( File projectDescriptor,
                                                ArtifactRepository localRepository,
                                                ProfileManager profileManager )
@@ -1329,7 +1337,8 @@
             throw new InvalidProjectModelException( projectId, pomLocation, "Not a v4.0.0 POM." );
         }
 
-        StringReader sReader = new StringReader( modelSource );
+        Reader sReader = new InterpolationFilterReader( new StringReader( modelSource ),
+                                                        getInterpolationVars() );
 
         try
         {
@@ -1342,6 +1351,18 @@
         }
     }
 
+    private Map getInterpolationVars() {
+        java.util.Map result = new java.util.HashMap();
+        if (settings != null) {
+            for ( Iterator it = settings.getActiveProfiles().iterator(); it.hasNext(); ) {
+                String profileId = (String) it.next();
+                org.apache.maven.settings.Profile profile = (org.apache.maven.settings.Profile) settings.getProfilesAsMap().get( profileId );
+                result.putAll( profile.getProperties() );
+            }
+        }
+        return result;
+    }
+
     private Model readModel( String projectId, URL url, boolean strict )
         throws ProjectBuildingException
     {